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Portland is banking on faster internet to help grow its economy

If Portland is to grow economically, attract job-creating businesses and boost population to round out its tax base, it needs faster internet.

That’s that logic behind a set of multi-million dollar proposals to bring broadband to Maine’s economic hub that the city is examining.With the shift in American jobs from manufacturing to the service and information sectors projected to continue, the availability of high-speed, low-cost internet is likely to become an increasingly important factor in where businesses choose to locate their operations.

But it’s an area where Portland lags behind other American cities with broadband. And despite the availability of high-speed internet infrastructure throughout the state, Maine was estimated to have some of the worst internet access in the country in 2014.

“What we’re seeing nationwide is that cities that have a faster networks see it improve the business climate in their community because businesses are demanding the fastest system possible,” said city councilor David Brenerman.

The idea that fast internet is required for economic growth and business innovation is part of what drove a company to build a spine of high-speed cables running the length Maine. The so-called Three Ring Binder is a 1,100-mile fiber-optic network that runs from York County to Calais and Presque Isle.

It was built in 2012 by Maine Fiber Co. with a $25.4 million dollar federal grant and is tapped for fast internet by some municipalities and business, including Scarborough, Greenwood and Sanford. Whether Portland will link up to this network is part of what will be determined in evaluating plans to bring broadband to the city, said city finance director Brendan O’Connell.

Building high-speed internet infrastructure was a top priority for the City Council this year. And the city is now looking at various plans from fiber-optic cable company SiFi Networks to bring broadband to more than 30,000 homes and 4,500 businesses.

The different plans come with varied payment structures, including one in which the city would lease infrastructure from SiFi for an annually increasing rate starting at $1.4 million in the first year and topping out at $6.6 million in the 30th year. After three decades the city would own the network.

In its proposal, SiFi claims that installing fiber-optic cables could be revenue neutral for the city, as Portland could make money by selling use of the cables to internet service providers. The network would boost Portland’s gross domestic product and home values, SiFi claims.

Sifi has set up similar networks in Chattanooga, Tennessee and Iceland’s capital, Reykjavik. The company claims that introducing a high-speed network would increase competition from internet service providers and bring down costs for consumers. Installing the cables could take two-and-a-half years, according to SiFi.

The proposals will be jointly reviewed by the City Council’s finance and economic development committees. Brenerman, chairman of the economic development committee, said that while just how to pay for it needs to be worked out, there is solid support for bringing broadband to Portland.

“I can’t think of a greater incentive for economic growth than a high-speed, fiber-optic network,” he said.

Correction:A previous version of this post incorrectly stated the size of the federal grant used to help build the three-ring binder. It was $25.4 million.